Whether you’re just starting out or your business is expanding, many business owners need to think about hiring an extra pair of hands at some point. But employing staff is not always as simple as it seems – there is a huge amount of responsibility that comes with it, and businesses that fall foul of the laws could find themselves in very hot water indeed.

Hiring

When the time comes to take on new staff, the most important factor for you is to make sure you have the right person for the job – the right skills, the right attitude and, often the right personality. There are, however, other issues you need to take into account if you don’t want to end up on the wrong end of a lawsuit or prosecution. The most important issue here is discrimination. It’s against the law to choose or refuse anyone based on their race, gender, marital status, sexual orientation or if they have a disability.

All this needs to be considered before you decide on the perfect candidate; any job adverts must be non-discriminatory and you need not only choose your new employee based solely on their ability, but you must be seen to be doing so too. Remember, once you have hired staff, you must have employers’ liability insurance.

Salaries

Once you’ve made your hire, you need to pay them. Most full time employees must be paid on the Pay as You Earn (PAYE), where employers make the deductions for tax and national insurance and then pay HMRC directly. Businesses can register as an employer at the Revenue’s website.

How much you pay your staff is down to you, of course, but it must not be less than the legal minimum wage – £4.83 an hour for those aged 18-21 and £5.80 an hour for anyone older. The dates and times when you pay salaries should be set down in any employment contract, and make sure you don’t miss a payment – you could be held liable for any problems encountered by your employees, such as bounced direct debits and missed payments.

Employment contracts

In theory you don’t have to provide staff with a written employment contract. But in practice, having one will protect both you and your employee. In it should be details of the duties and responsibilities of the employee, along with their rights. You should include details of their salary, holiday entitlement, any benefits such as a pension, notice period and – if your business has one – disciplinary and grievance procedures.

While employment contracts vary – an office worker will have different terms to a long distance lorry driver, for example – you don’t necessarily need to get the lawyers involved. Templates and example contracts are available online for free.

Firing

Terminating a member of staff can be one of the most difficult jobs a business owner has. Aside from the emotional difficulty, and the impact on the morale of other staff, it’s a legal minefield. If your member of staff has committed gross misconduct – committed a crime, or put other people in danger while at work, for example – then they can be summarily dismissed. But if you want to let someone go for poor performance, it’s a little more complicated.

The key here is to keep written records of everything you do. It’s important to be able to show you have tried to encourage your staff to improve their performance, and have warned them in advance of the potential consequences if they fail to do so. There are thousands of cases in the UK each year where employees sue for unfair dismissal, and many of them, says employment lawyer Sam Allen, are down to lack of communication: “If it comes as a surprise to someone they are being let go for poor performance, they are much more likely to want to have their side of the story heard.”

If your employees do anything that results in a legal claim while working for you, your business could be held liable for any damages. Public liability insurance and potentially product liability insurance will help protect you from any claims.

Health and safety

The Health and Safety at Work Act 1974 is the main piece of legislation employers need to consider. As an employer, you have a duty of care to your employees, which basically means the work environment must be safe, equipment must be checked, safe working practices must be implemented and materials are stored and used carefully.

You will also need to provide first aid facilities and have plans in place should an accident or emergency take place. Some accidents or emergencies will need to be reported to the HSE if they occur.